Girdhar and Parekh v Bradstock [2014] EWHC 1321 (Ch)

(Chancery Division, Mr Jonathon Klein (sitting
as a deputy judge of the High Court), 9 May 2014)

An unauthorised modification in an IVA proposal,
if proven, would constitute nothing more than a material irregularity and would
not invalidate the IVA.

The Second Claimant (‘P’) proposed an IVA which
was subsequently approved at the meeting albeit with a modification. Payments
were made under the IVA and it was twice varied at P’s request. P failed to
honour his obligations under the IVA and P’s nominee petitioned for his
bankruptcy.

P subsequently sought declarations that the IVA
was a nullity as (i) he had not provided consent to the modification contained
in the original IVA and (ii) the Chairman had used an unauthorised proxy vote
to support the inclusion of the modification.

The court dismissed P’s
claim holding against him on the facts. It did however also hold that had P
made out his case then the acts complained of by P would have constituted
nothing more than a material irregularity for the purposes of s 262 IA. In
those circumstances, the order would have remained valid until there was an
order revoking or suspending the IVA.